The legal glossary, in plain English

The transfer of contractual rights or obligations from one party to another, usually requiring the consent of the non-transferring party.

Something of value exchanged between contracting parties — typically money, goods, services, or a promise — that common-law courts look for before they will treat a promise as a contract.

A counterparty is the other party to a contract or transaction — the person or entity on the opposite side of the agreement from you. Each side of a two-party contract is the other's counterparty, and counterparty risk is the chance the other side fails to perform.

A covenant is a promise within a contract to do something (an affirmative covenant) or to refrain from doing something (a negative or restrictive covenant). Breaching a covenant is a breach of contract that can trigger remedies or default.

A digital indication of intent to be bound by a contract — such as a typed name, drawn signature, or clicked acceptance. Under US law, a signature or record cannot be denied effect solely because it is electronic.

A contract clause that excuses a party from performing its obligations when extraordinary events outside its control — such as natural disasters, war, or pandemics — make performance impossible or impracticable.

A memorandum of understanding (MOU) is a written document recording the intentions and key terms agreed between parties before a formal contract. It is typically non-binding as to the deal itself, though specific clauses like confidentiality and exclusivity can be made binding.

A clause declaring that the written contract is the complete and final expression of the parties' agreement, superseding any prior or contemporaneous discussions or agreements on the same subject.

Statements of fact made by each party at the time of contracting (representations) and promises that those facts are and will remain true (warranties), with breach giving rise to remedies.

A clause stating that if one part of a contract is held unenforceable by a court, the remaining provisions continue in full effect.

A common-law doctrine, codified in every US state, that requires certain categories of contracts — including those that cannot be performed within one year and contracts for the sale of real property — to be in writing and signed to be enforceable.

A contract under which one or more parties agree to keep specified information confidential and not disclose it to third parties for a defined period.

A framework contract that sets the overall legal and commercial terms between two parties for an ongoing services relationship, with specific projects governed by separate Statements of Work.

A retainer agreement is a contract in which a client pays a fee, often upfront or recurring, to secure a service provider's availability or ongoing services over a period. It defines scope, fees, how the retainer is applied or replenished, and termination terms.

A subordinate contract under a Master Services Agreement that defines the scope, deliverables, timeline, milestones, and fees for a single project or engagement.

A clause allowing one or both parties to end the contract without cause, typically after providing advance written notice and paying for work completed.

An employment relationship under which either the employer or the employee may end the employment at any time, for any lawful reason, and without advance notice.

A contractual restriction preventing a party — usually an employee or seller of a business — from competing with the other party for a defined period and within a defined geographic area.

A non-solicitation clause restricts a departing employee, contractor, or party from soliciting a company's customers, clients, or employees for a defined period after the relationship ends. It is narrower than a non-compete, and courts in more states are willing to enforce it.

A copyright doctrine under which work created by an employee within the scope of employment — or specially commissioned work that falls into nine statutory categories — is owned by the employer or commissioning party from the moment of creation.

Money held by a landlord during a tenancy as security against unpaid rent, property damage beyond normal wear and tear, or other lease violations, with most jurisdictions imposing caps and return deadlines.

A contract required under data-protection law (notably GDPR Article 28) between a data controller and a data processor that defines the scope, purpose, security, and obligations of personal-data processing.

A document disclosing what personal information a business collects, how it is used and shared, the user's rights regarding that information, and the business's legal basis for processing.

The contract between a business and the users of its website, app, or service, governing acceptable use, payment, liability, dispute resolution, and intellectual property.

A contract among the co-founders of a startup defining each founder's equity, vesting, roles, decision-making rights, and what happens if a founder leaves.

The internal governance document of a Limited Liability Company (LLC), defining ownership, management, member rights, and operational rules of the LLC.

A contract between two or more persons or entities forming a general or limited partnership, defining each partner's capital contribution, profit share, management rights, and exit terms.

A contract provision requiring disputes to be resolved by a private arbitrator rather than litigated in court, often including waiver of jury trial and class-action rights.

A contract clause specifying which jurisdiction's laws will be applied to interpret the agreement and resolve disputes arising under it.

A hold harmless clause is a contract provision in which one party agrees not to hold the other liable for specified losses, damages, injuries, or legal claims arising from the agreement or a defined activity. It shifts risk between the parties and often overlaps with indemnification.

A contractual promise by one party to compensate the other for specific losses, damages, or legal liabilities arising from defined events — typically third-party claims related to the contract.

The authority of a court to hear and decide a case, determined by both the court's power over the subject matter and its power over the parties involved.

A clause that caps the amount of damages one party can recover from another and excludes certain categories of damages (such as consequential, indirect, or lost profits).

A pre-agreed amount the breaching party must pay if a specified breach occurs, typically used when actual damages would be difficult to calculate.

Novation is the substitution of a new contract, obligation, or party for an existing one, with the consent of all parties. It extinguishes the original agreement and, unlike assignment, transfers both rights and obligations while releasing the original party from liability.

A court order compelling a breaching party to perform its contractual obligation, used when monetary damages cannot adequately remedy the breach.

A formal amendment to an existing will, executed with the same formalities as the will itself — signed and witnessed. In the era of quickly regenerated documents, replacing the whole will is usually safer than layering codicils.

The statutory minimum a surviving spouse can claim from a deceased spouse's estate regardless of what the will says — typically one-third to one-half, varying by state and sometimes by marriage length. It is why a spouse generally cannot be fully disinherited.

The person named in a will to carry it out: file the will with the probate court, gather assets, pay debts and taxes, and distribute what remains to the beneficiaries. Many states now call this role the "personal representative."

The clause in a will nominating who should raise the testator's minor children — the one decision no other standard estate document can make. Courts honor the nomination absent disqualifying circumstances; without it, a judge chooses.

A will written in the testator's own handwriting and signed, without witnesses. Roughly half of US states recognize holographic wills under strict conditions; the rest treat unwitnessed handwritten wills as invalid.

Dying without a valid will. State intestacy statutes then distribute the probate estate to relatives in a fixed order — typically spouse and children first, then parents and siblings — and a court chooses guardians for minor children. Unmarried partners and stepchildren inherit nothing.

A legal document in which a person (the testator) directs who inherits their property, nominates an executor to carry out those wishes, and names guardians for minor children. It takes effect only at death and must be executed with statutory formalities — typically a signed writing attested by two witnesses.

A will provision that disinherits any beneficiary who unsuccessfully challenges the will. Enforceability varies sharply: many states enforce them, several excuse probable-cause challenges, and Florida refuses to enforce them at all (Fla. Stat. § 732.517).

A distribution rule meaning "by branch": if a beneficiary dies before the testator, that beneficiary's share passes down to their own descendants rather than lapsing or shifting to co-beneficiaries. The alternative, per capita, divides equally among surviving members of a generation.

The court-supervised process of validating a will, appointing the executor, paying the estate's debts, and distributing the remaining assets. Cost and duration vary sharply by state — from streamlined independent administration to percentage-fee regimes.

Everything left in an estate after specific gifts, debts, taxes, and expenses — the "everything else." The will's residuary clause directs where it goes, catching forgotten assets, later-acquired property, and failed gifts.

A notarized statement signed by the testator and witnesses confirming the will was properly executed. It lets the probate court accept the will without locating the witnesses to testify — the main reason to involve a notary in a will at all.

The person who makes a will. To be a valid testator, a person must generally be at least 18 years old and of sound mind — able to understand what property they own, who would naturally inherit it, and the effect of signing the will.